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[00:00:28] So you and your friends don't miss any episodes. Don't forget to follow and share. Now here's our latest podcast. Welcome again listeners to Community Radio Northern Beaches 88.7 and 90.3 FM streaming live. It's on our website www.rnb.org.au. Our podcasts and archives, radionorthernbeachespodcast.com.au. Programmes Community Voices and I'm Michael Lester.
[00:00:55] At this point in Australia, there's upwards of 700,000, 800,000 participants and families with disabilities involved in what's called the National Disability Insurance Scheme, the NDIS for short, which was brought into our health system some 14 or 15 years ago in 2012 with legislation introduced by the Prime Minister Julia Gillard.
[00:01:19] She quoted as saying that it was to replace, quote, a system that meets out support rationed by arbitrary budget allocations and not by real human needs. So this was quite a radical break in forms of welfare and health assistance at the time. But in that time, since the program has really grown and blossomed, it's now growing at quite a rate of 8 to 10, 10% a year, I think, in terms of expenditures, some $50 billion a year and growing.
[00:01:49] So the current government's had to step in and make some pretty transformative changes that are affecting a lot of people, as you can imagine. To discuss these issues, I'm very pleased to welcome to our program Roger Beale. Roger is a former, very senior public servant in the Commonwealth Government. In fact, he's the longest serving disabled Commonwealth Departmental Secretary and Head in the history of the APS, I believe.
[00:02:12] And he has a strong personal experience of living with disability and in particular exposure to the National Disability Insurance Scheme. So thank you, Roger, for joining us on Radio Northern Beaches. I'm delighted, Michael. Roger, you're no expert, I'm sure, and wouldn't claim to be on the NDIS as a scheme. I don't believe you've been involved in its design or its administration. But you have a lived experience yourself of it, as well as an interest in how it's going.
[00:02:42] OK, Michael, perhaps starting with my own disability. I contracted polio in 1948 in one of the great post-war epidemics. I now use a wheelchair, braces on my legs, crutches, basically to get through life. So all my life I've been different from other people, but I've had a very rich life nevertheless.
[00:03:08] Now, with the NDIS, my experience is not being part of the NDIS. And that's because I was too bloody old when the NDIS rolled out. Just to explain that, that might seem a bit odd. Yes. In 2013, the legislation was eventually passed.
[00:03:33] As you said, Julia Gillard pointed out, that for the first time, Australia had established a rights-based welfare scheme, safety net scheme. And that reflected the scheme being set up to implement the Convention on the Rights of People with Disability, which the government had ratified earlier.
[00:04:02] The legislation, at the end of the day, passed with bipartisan support. So it was very unusual. It was based on rights, not on budgets. Now, even from the beginning, there was a worry that if older people were included, they would make the scheme more costly. And as a result of that, those of us who were over 65, and I was a long way over 65, were excluded right from the beginning,
[00:04:32] even though we'd been disabled all our lives. So what happened? The scheme was carefully mapped out by actuaries. It had been developed by two people I knew reasonably well. Patricia Scott, who'd worked for me in the Prime Minister's Department, and John Walsh, whom I worked with in PricewaterhouseCoopers. John was an actuary. And the estimates were that it was quite affordable. What's happened?
[00:05:01] Well, essentially, it's grown at a rate which has stunned the initial proponents and rendered the order estimates, the actuarial estimates, totally wrong. Why has that happened? A number of reasons. One of them, perhaps the principal one,
[00:05:19] has been the growth of the rate of diagnosis of young people with developmental delays as a result of being members of the autism spectrum disabilities. That growth has reached the point where, so far this year, 70% of the new entrants are people in that category. Now, I'm not saying this is wrong.
[00:05:48] It's just a rather surprising thing that caught everybody unawares. But there are other reasons. Can we just pursue this thing that, okay, so there was these great actuarial studies, which presumably projected numbers that seemed reasonable at the time that could be managed in budgets and whatever going forward. But you get this huge growth that we've experienced and are still experiencing. And you're pointing to this issue about children with developmental needs.
[00:06:14] It makes you wonder, but to what extent is this a matter of changing practices and definitions and standards about what psychiatric diseases and disorders really are and how they're defined and identified? Absolutely.
[00:06:29] In 2013, the psychiatrists revised the Bible of psychiatry, the Diagnostic and Statistical Manual of Psychiatric Disorders, to combine a number of understood disorders within a disorder called autism spectrum disorders.
[00:06:57] And the idea there is that there's a spectrum. That's point one. Now, it's not that those people weren't in the community. We had just never quite recognized their existence. So it's not their fault. The rates of autism spectrum disorders have not changed. It's our recognition of them that has changed.
[00:07:22] The second thing that had happened, most of these children, and they were mainly children, have been supported by the states through the school system. Well, there's the NDIS. And the states quite happily have shuffled off a lot of what they used to do onto the Commonwealth via the NDIS.
[00:07:50] So in part, the rising expenditure under the NDIS has been echoed by a falling need to support those people by state budgets. So this is what's often called, Roger, is it sort of responsibility shifting, cost shifting in our federal system, which happens in many domains, doesn't it? And here it seems to be the case that these young kids with developmental needs were being addressed
[00:08:19] one way or another through state education systems. But with NDIS and the redefinitions, they were able to come in under a federal umbrella to get support. And I presume the state governments weren't, in a sense, having to pay as much as before. I believe that one of the responses only in the last year or two to this situation is that the government has actually now created a new scheme for these children
[00:08:43] called Thriving Kids Scheme, which they're therefore taking the kids out of the NDIS equation directly and are negotiating funding agreements with the states. Is that how they've responded to this? Absolutely. It's a perfect example of cost shifting and it's a perfect example of a Commonwealth response that tries to get back some balance.
[00:09:06] So when we look at the burgeoning cost of the NDIS, we have to remember that it's often offset by falling costs elsewhere in the system. It's also, of course, has led to improvement in the way that many of those children were supported and treated. And I think part of the reason behind the great surge, you know, the 70% who are being registered
[00:09:35] in the NDIS at the moment, part of that is probably to get children in the queue, you know, get them recognised for whatever happens as systems transit. And you can't blame their parents for doing that. I don't know what the current situation is. Have the states signed up for reasonable funding arrangements now between the states and the federal authorities? Look, I'm not absolutely sure, to be frank.
[00:10:04] I'm a veteran of negotiating with the states. But there's just general recognition that it's going to happen. And it will happen progressively as state after state signs up. These things don't happen quickly in our system. Now, we've seen that with school funding and a whole lot of other areas. I'm speaking to Roger Beale here on Radio Northern Beaches Community Voices about the National Disability Insurance Scheme and the situation it's now in.
[00:10:30] One of the big sources of the big budgetary unexpected blowout was this issue with children and learning disorders. But there were other factors, no doubt, driving costs. Maybe there were increases in participants. But I believe that the unit costs, too, of payment, particularly to participants, has been growing, and even continues to grow at a rate much faster than inflation. Is there any particular reason why that might be? There's probably, as usual, a range of reasons.
[00:10:58] One of the problems when you look at averages is that you don't look at the tails. Now, a huge proportion of NDIS expenditure is on the 7% or so of people who really do need full-time comprehensive support.
[00:11:16] Partly, that's a combination of problems where people have been another cost-shifting problem shifted between Commonwealth and state schemes, from state schemes into the Commonwealth. Partly, it's that we've recognised that we've been underpaying carers for a long time. We're paying them more.
[00:11:38] Partly, it's because we didn't have very effective control systems, and quite a proportion of providers were unregistered. So there's always a range of reasons why these things happen. Costs of equipment have risen. The last time I had a caliper, that's one of those long leg braces that people like me have to have to be able to stand up.
[00:12:07] Last time I had one, which was made, which was about five years ago, it cost $8,000. The replacement quote that I've had now is $18,000. So that's not a modest increase. Now, I will pay for that. It won't be a matter for the NDIS because I'm not allowed. But it's an example of the technology getting better, that's for sure, but it's getting much more expensive.
[00:12:38] And the same space, the same thing has been happening in the medical space, as you know. Medical costs have risen faster than general costs in the community. So think about a range of factors, and one of the big ones is we're paying people better than we did, and technology is costing more.
[00:13:00] And as the people who need intensive support age, their needs increase as well. An element of the design of this program is very much, as I understand it, basically outsourcing to private sector service providers to provide these disability support services, as I understand it.
[00:13:21] And the questions arise about the fees that these private providers are providing, and also in the context of to what standard are they providing these services, and to what accountability and transparency. Where do the private sector providers and their fees fit into this possibly escalating cost scenario, if at all? Well, they certainly do.
[00:13:45] And this is one of the issues that the revised NDIS Act has been trying to address, just as the aged care, the new revised aged care programs have been trying to address. Yes.
[00:14:30] Service providers weren't registered in the past. And as a result of that, it was very hard to keep track by the NDIA. That's the authority that administers the Act. It was hard to keep track of what they were charging for comparative services and how well they were providing them. Were they good enough? What were the standards?
[00:14:53] But when you decide to tighten things up, as the new legislation does, it is an enormous bureaucratic imbalance while the systems get sorted out. So there are lots of delays. This is happening in aged care at the moment. There are lots of delays, lots of uncertainties, and lots of anxiety for the clients of the NDIA,
[00:15:19] the people receiving NDIS support, as previous arrangements are disrupted. Remember, this is vitally important to these people. And it's not surprising that there's a degree of anxiety in the community. Yeah, there certainly is with these changes. But just back to that issue about service providers and fees and standards, I believe that the current new proposals have put in place a new watchdog to keep an eye on some of these issues.
[00:15:46] And I believe there is evidence of, I believe, significant range of fraud, organized crime, let alone price gouging going on in the system. How significant do you think these issues are? Well, look, I think you're talking about millions of dollars, but it's not sufficient to say that that's the key cause of the rise in costs.
[00:16:10] Any government welfare system or scheme, any, for that matter, large corporate private scheme, is open to exploitation unless the gates to exploitation are quickly and firmly shut. I don't think that the NDIA had the capacity to do that under the old scheme,
[00:16:32] but I believe that the changes make that far more possible for the people who are invigilating these providers to actually exert that sort of discipline. There's no doubt that there's been fraud, none at all. Now, this budget blowout, if I can use the term, but for the reasons we've been discussing, these are now huge sums of money. As I say, over and above $50 billion a year and growing at still a pretty considerable rate,
[00:16:58] although I believe the government has set a ceiling of 8% growth in the budget, which we'll come to. But there's been many discussions, hasn't there, about different options for how to fund the NDIS. Now, it's called an insurance scheme. So what exactly is the nature of the design as an insurance scheme? And what's the range of funding options that have been looked at, none of which, incidentally, I believe, have ever been accepted in a bipartisan mode? They've in fact been rejected in a bipartisan mode.
[00:17:28] Let's just sort of step back and examine this. The NDIS was never, in my opinion, really an insurance scheme. It was an insurance scheme to the extent that there are actuarial estimates of the costs, yes. It was an insurance scheme in the sense that people had a right to apply for recompense for an injury, i.e. a disability. That's absolutely right.
[00:17:57] But no one was asked to pay a premium. Now, classic insurance schemes always have a premium. That was not part of this scheme. It was funded out of general revenue. And by insisting that it was rights-based, and in that sense, an insurance, the ability to control it, top down, in the crude way, the governments normally control welfare expenditure by queuing and rationing. That wasn't there.
[00:18:27] That wasn't there. It was a very much younger.
[00:18:56] And they proposed a 1% income tax levy based on the Medicare levy. You know, that same sort of idea. That was quickly rejected on a bipartisan basis. I had discussions with, well, surely say, very senior officials in a range of departments who have their hands directly on economic and financial matters.
[00:19:24] And we discussed a number of options for targeting super concessions and tying that to dealing with the costs of the NDIS and aged care. That was rejected. So there have been a variety of suggestions. But there's an interesting macro picture that we ought to think about.
[00:19:48] In the OECD, which is the club of rich and nearly rich countries, we are among the lowest 10 in terms of our overall tax to GDP ratio. So we don't raise a lot of money to spend on things like the NDIS or, for that matter, defense or health or aged care, education, whatever.
[00:20:13] The only other country with as high or higher per capita income in that group of 10, as high as Australia, is the U.S. And we well know the U.S. does not raise as much tax as it needs to to fund its deficit.
[00:20:38] So very proudly, Donald Trump says, well, we can afford to run massive government deficits because the world is eager to buy our debt. We don't have that luxury. But overall, we're a low taxing country.
[00:20:55] The other countries in that group who tax less than we do are people like Chile, Mexico, Turkey, fast-growing emerging economies. But they don't have the living standards that we do. So we could afford to do more if our community was prepared to pay more tax, which both parties seem to think is extremely unlikely.
[00:21:25] I believe one of the options that's been talked about is, is it a bit like medical insurance where, you know, co-payments have been considered as an option that the so-called well-off people, disabled people in this case who want access, would be asked to make gap payments and out-of-pocket expenses. Is there any particular problem or issue? And this isn't actually being looked at or is it?
[00:21:52] I don't think that's been really, really actively pursued. This is, again, unusually for Australia, a case of universal welfare. It looks at people with a disability and saying they should be made whole. Let's look at the disability, not at their financial background. This is very much a European approach.
[00:22:20] Very much what Norway would do, what Sweden would do, what the UK would do, what Germany would do.
[00:22:28] Australia has been very unusual among the advanced economies in income and asset testing, our benefits schemes, so that we spend a relatively low proportion of our budgets, relatively low proportion of GDP on transfer payments, on welfare payments.
[00:22:54] But we've always prided ourselves on that being fairly effective. Now, that hasn't happened with NDIS. But what the government did was make damn sure that people like me, older people, can't get that sort of support.
[00:23:15] So, older Australians on home care, but who have very similar disabilities to those supported by the NDIS, do have their payments income condition. Now, I'm expected to pay much more than any care I receive, apart from clinical care.
[00:23:41] And there are caps on how much care I will receive in my lifetime. And that's because I'm considered to be, not conspicuously rich, but relatively well off as a retired secretary. I think it's been referred to somewhere, and I don't know if it's the right label here, as lazy ageism. Roger Beale, I'm talking to here on Community Voices Radio in Northern Beaches about the National Disability Insurance Scheme.
[00:24:09] In many ways, what started out, as we said, as a very radical proposal and break from other forms of welfare assistance to make it human rights based, broad based and what have you. We seem now, with the current changes and nature of changes, to move to very much more a rules based system with very strictly defined levels of entitlement.
[00:24:32] Now, one of these manifestations, perhaps, is that I believe that there's talk about bringing in computer-based software to allocate funds to individuals under the NDIS. This has echoes to me of the robo-debt fiasco and criminality that we've just seen exposed through NAC and the Royal Commission.
[00:24:57] Is this a sensible way for us to be going to try to control costs by getting computers to allocate funds to individual people with disabilities? I think what's really disturbing about it is not that they're using an algorithm. After all, you and I probably both use algorithms in our daily lives. What's disturbing is that there seems to be no way of saying, well, the computer's wrong.
[00:25:24] This is just not, the algorithm isn't working. It's just not picking up the right nuances. So while they'll no doubt review it over time, there doesn't appear to be any way of addressing individual injustices and errors.
[00:25:46] I know a lot of the professional people involved, physiotherapists, doctors, occupational therapists, psychiatrists, are concerned about the accuracy of the algorithm when it makes individual choices.
[00:26:06] And the disturbing thing is, as I said, there seem to be restricted avenues for really contesting what the computer says. The computer says no. Maybe the answer is too likely to be no as distinct from, well, the computer's wrong.
[00:26:30] Roger, you've spoken about the levels of anxiety and uncertainty by people with disabilities. And we're talking seven, eight hundred thousand participants, I believe, nationally. It's a lot of people experiencing a lot of anxiety and uncertainty, not least with these very radical changes to a more rules based sort of entitlement system.
[00:26:52] I believe that this has been reflected in part in a huge rate of increase in appeals against some of the decisions to the administrative appeals tribunal body and that the agency responsible for NDIS is now spending tens of millions of dollars of taxpayers money a year paying lawyers to fight these cases.
[00:27:16] It's unsurprising when there's uncertainty and when there's anxiety about what is the basis on which I'm moving to this new scheme. It does provide people with that incentive to make sure that the system's got it right from their point of view. That's not entirely surprising. And quite recently, the NDIA lost quite an important case in the federal court.
[00:27:46] And it was one which essentially it had argued that a man couldn't get a mobility scooter because the reason he'd been admitted to the NDIS didn't relate to the reasons that he now needed a mobility support system.
[00:28:09] And the judges at the end of the day said, well, look, you're going to have to look at his situation now, not what it was when he was admitted. So the NDIS is still rights based. It's just that the rights and what you have a right to has been much more closely defined.
[00:28:38] But the judges are still going to become involved. That's not quite as readily available in the aged care system. Another difference where governments are really saying, oh, gosh, we burnt our fingers with the NDIS. Let's make sure that the old buggers don't get away with this sort of lawfare.
[00:29:06] Well, look, Roger Beale, thank you so much for taking the time to join us on Community Voices Radio Northern Beaches to talk about, well, in many ways, the very VEX situation and pretty radical transformation of a radical scheme. The National Disability Insurance Scheme after 15 years of operation now, mainly a transition from a human rights based system to one that does seem to be pretty much budget driven. But in any event, thanks very much for joining us, Roger. Appreciate it. Thank you, Michael. Australia, the lucky country.
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